More Affordable Car Insurance for Teens
August 26th, 2010
Now that we’re heading back into the school year, it’s worth bringing up the subject of grades – and how keeping them up can result in more affordable car insurance for young people.
You’re probably aware of the fact that most insurers offer better rates on students’ auto policy premiums when they maintain a better grade point average (and this applies to college students as well), but you may not be aware of the logic behind it; there are some hard statistics behind the practice of offering good student discounts. In addition, you may be surprised to find out just how much you can save on car insurance with good student discounts.
Why Insurers Do It Auto insurers are not just offering an incentive to make kids study harder in school when they give high academic achievers a break on their auto insurance price. Regardless of whether its for an auto, a home or anything else, property and casualty insurers do not set premiums randomly.
Actuarial science is the branch of mathematics that deals with statistics and probabilities. Among other things, actuaries use research studies as well as complex mathematics to determine risk. What they have discovered over the years is that teenagers who maintain high academic standards are more careful, conscientious drivers and have far fewer accidents.
How Much You Can Save Good student discounts vary, but could cut your car insurance price by up to 15% or more (depending on other factors such as company policy, your location and the make and model of the vehicle). For example, when you add your 16-year-old as a driver of the family car, your insurer will raise your rates by as much as $800 a year. A good student discount can slash that figure by as much as $120. If your teenager is getting his/her own vehicle, that student discount is even more important, since that variable could raise your premiums by as much as a whopping $3,500 a year. In that case, you could save well over $500 a year with a good student discount.
Getting Additional Discounts Some insurers offer additional discounts for teens who enroll in and successfully complete professional defensive driving courses. Professional driving schools usually offer real-world, behind the wheel training in how to deal with potentially dangerous situations. One company offers a 20% discount for students with a GPA of at least 3.0, then doubles that discount when the student completes a defensive driving course.
Keep in mind that the make and model of the vehicle can also have a huge impact on auto insurance premiums. To get the best car insurance quote, make sure your teen is driving a late model four-door sedan with lots of safety features; vehicles such as sports cars and SUVs can be extremely costly to insure.
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